Hamish McRae: The Fukushima effect, globally, will be colossal

The former British chief scientific adviser says the UK should press on even faster with new nuclear power stations; the German voters say Germany should dump them altogether – and it looks as though the Berlin government will agree.

It is not quite as stark as that, but it is hard to underestimate the significance of what is happening in Germany over nuclear power. We may or may not build a few new stations, most probably only on the sites of existing ones. Sir David King's argument is that if we build the plants quickly we can use the spent fuel from existing plants to power them. But whatever you think of that argument, what the UK does or does not do will not materially affect the future of nuclear power in the rest of the developed world, let alone the emerging countries. What Germany does, however, will. It is a much larger industry and the country's reputation in nuclear power generation is less chequered than our own.

What happened at the weekend in Germany was a rejection of nuclear power. The defeat of the coalition of Christian Democrats and Free Democrats in Baden-Württemberg elections were stunning because the region is one of the most successful, not just of Germany, but of the world. Its GDP per head is among the highest in Europe, its unemployment rate is less than 3 per cent. It has also been run by the Christian Democrats for nearly 60 years. So why this result? Well, doubtless, the prospective bail-out of Portugal did not help and there are local issues. But nearly 70 per cent of the voters cited nuclear power as the main concern and saw Chancellor Angela Merkel's sudden promise of a moratorium on new stations as a political device.

Since the vote, there have been reports of Germany extending the moratorium and coming up with an entirely new energy strategy. We will have to wait and see, but it seems a reasonable assumption that nuclear power will not play a significant role in any increase in Germany's power generation mix. More likely, it will go into gradual decline.

If that is right, consider the consequences. If Europe's largest economy steps back, who will step forward? France will try, but since it already produces 75 per cent of its electricity from nuclear it will, at most, increase that by a small percentage.

From a global perspective it seems most probable that the impact of Fukushima will be similar to that of Chernobyl: hardly any new nuclear power stations being approved for the next 20 years. Maybe China will continue with much of its programme. But think of the big numbers. About 6 per cent of the world's primary energy comes from nuclear. That was never going to increase by more than a few percentage points; now it will most probably fall. So what will happen?

There have been two excellent studies of long-term energy needs in recent months, one from BP looking at energy in 2030, the other from HSBC looking at the position in 2050. The common theme was that the "business as usual" energy mix would bring grave difficulties and that while renewables and nuclear could make a contribution, these would not be the game-changer. Conservation would be the crucial thing that might.

By 2050 India will have 350 million cars on the road, more than the US and Europe combined. China will have 500 million. Cars and light vehicles account for half of all transport fuel, with road freight another quarter. Air transport, politically somewhat under the cosh, accounts for only 9 per cent; sea much the same and rail a mere 3 per cent. So making road transport more efficient is the key to solving the transport element of the puzzle.

Other key points emphasised by HSBC include efficiency in buildings, which account for 38 per cent of total energy use, and in industry. The central point here is that while nuclear power promised to help us along the path to a lower carbon future, we could, to some extent, kid ourselves that ambitious targets might be attained. It was always going to be marginal but change is at the margin. If we have to accept that there will be no contribution from nuclear, then we have to think even harder about conservation – and how to be sensible about that.

Rising tide that will lift euroscepticism

Confirmation of the shrinkage of the economy in the last quarter of last year came through yesterday, though beware the "final" tag on the numbers. In the past, GDP figures have been revised up to three years after the date of first publication – I still expect that to happen. But at face value, the picture is of an economy that would have been flat during the period were it not for weather-related disruption, with consumption being squeezed and investment rising. Separate figures yesterday confirmed that investment recovery. We will have to wait to get first quarter GDP figures, for we have not even ended the quarter yet, but I am not sure we will get that much of a rebound, for in contrast to the pre-Christmas period these last few weeks feel rather weak. There were some other numbers from the Bank of England showing continuing weak lending to consumers and only a tiny increase in mortgage approvals. Not much fizz there.

The other new data yesterday was the balance of payments. We now have a rising surplus with the non-EU countries and a rising deficit with the EU, with that deficit increased by record payments to Brussels. That was £9.2bn last year, against £5.3bn in 2009. The rising cost of EU membership is not yet a political issue, but may well become so in the light of the squeeze on other spending.